Microbial fuel cells (MFCs) represent a new method for simultaneous wastewater treatment and biological electricity generation. In this study, a two-chambered MFC with small resistance proton-wall was operated and the results indicated that Chinese medicine wastewater (CMW) containing 28,000 mg/l of chemical oxygen demand (COD) could be used as substrate to produce electricity with this MFC. Maximum power density of 90 mW/m² (400 Ω internal resistances) was approached. In order to try to determine the process of COD and color removal, and the value of BOD5/COD increased, two parallel tests (MFC circuit (close) and anaerobic circuit (open)) were conducted with the same experimental conditions. The former of COD and color were removed from 12,000 to 4,000 mg/L (67% removal) and from 3,300 to 100 (97% removal), and the latter were removed from 12,000 to 2,000 mg/L (83% removal) and 3,300 to 1,000 (70% removal) as a function of time. At the same time, the test also found the value of BOD5/COD increased, ranging from 14% to 26%, it means the biodegradability of wastewater can be mainly enhanced after the MFC operation. These results all demonstrated that CMW can be used for power generation in MFCs and also can be treated with high removal efficiencies of COD and color.